Russia may ban the export of wheat and other grains
The project of the Ministry of Agriculture and the Ministry of Industry and Trade was supported by Deputy Prime Minister Victoria Abramchenko. What is the reason for such restrictions and what might be the consequences?
Updated at 00:16
The project of the Ministry of Agriculture and the Ministry of Industry and Trade of Georgia, which provides for the introduction of a temporary ban on the export of basic grain crops from Russia from March 15 to June 30, that is, from tomorrow, writes Interfax. It is reported that the measures will affect wheat, rye, barley and corn.
Project supported Deputy Prime Minister Victoria Abramchenko. It’s a temporary measure, she said, aimed at “preserving volumes domestically, which keeps prices down and hides the need for food products and processors.” What might be the consequences of such restrictions? comments Russian Presidential Grain Union Arkady Zlochevsky:
– This is a question, probably not for me about the reasons. It probably needs to be connected to the regulator.
Maybe we have a shortage?
— We don’t have any deficit and can’t have it in terms of members. In the current case, this is impossible in principle, we have a shortage of a certain amount of volumes. Just due to the fact that the complexity of the composition and the situation changed, even from the planned volume, some amount will not be exported. So we have no problems with internal supply at all. Now there is only an outbreak from the sowing campaign. They can watch next season’s gross. That is, the harvest of this year, which we collect in the summer, about this speech.
– That is, this is most likely some kind of political step?
– Well, yes, this is more of a political step, then I don’t know what draft resolution you are talking about, because we also had a decision on a significant share of the export ban in the EAEU country. Wheat, meslin, barley, corn fall under this ban. It was a decision under the commission on customs regulation, but there were other figures. Ban until August 31st.
– You said that, on the contrary, there will be under-export, but could there be any consequences for the Russian economy and for the main markets of importers in Russia from such a decision?
– For importers, this is quite significant, because, of course, the rise in prices, and so now rather big. This is a blow to importers, of course, our buyer. That’s all. And for us it will all be just a part of the sowing campaign. If this is accepted now, then this is just a signal to the peasants that these crops that fall under this should not be sown.
According to the Sovecon center, the purchase prices for Russian wheat increased almost 9% exceeded 18 thousand rubles per ton (without VAT) – this is an absolute record.
Analysts attribute the rise in prices to the fall of the ruble and the jump in world wheat prices, which have risen by 40% in dollars over the past two weeks. In the theory of the export ban, there may be an experience of domestic consumers from imported consumption. In the short term, Sovecon expects that ruble prices will continue to rise if government regulation risks do not materialize.
The ban may seem like a collapse of the domestic market in Russia, believes Andrey Sizov, director of the Sovecon analytical center:
— What could be the consequences for the Russian economy and for the markets, the main importers of Russian consumers, from the decisions?
— So far, this decision is not clear until the end. We are talking about a complete ban or that some volumes will be exported under a license, as Abramchenko said. The scale is not yet clear. If a complete ban or almost a complete ban, we will now see a new wave of very serious price increases in the world market, and probably not immediately, but a serious drop in prices in the external market, because the stocks are very high. We estimate the export potential, which can be exported during the average season, at about 6-8 million tons. If these 6-8 million tons are not exported and returned to the market, we will quite possibly get a collapse in prices and big problems for agricultural producers.
In total, Russia and Ukraine up to 30% of wheat exports. According to Deutsche Welle, sometimes all the features of key agricultural products necessary for the production of not only bread, but also fodder for meat production are revealed.
The main importers of wheat to Russia were the rules of Egypt and Turkey. Can it be assumed that the wide ban and exports under an environmental license in Moscow are affecting Ankara? Opinion RIAC relations expert Tural Kerimov:
“There is no reason for this. Relations with Turkey newborns on the rise. There are no frictions at the moment. Moreover, Turkey has adopted a very pragmatic and emphatically universal palette. Literally every day at the level of the Minister of Defense, at the level of the Minister of Foreign Affairs, at the level of the Parliament or the President of Turkey himself about the statement that she is not going to join any sanctions against Russia. It expanded into a dialogue. This position in your situation in the Donbass and Ukraine will not change now. I will try to speculate on this topic, it seems to me that it is not right now.
– In the event of a situation where the grain is incorrectly tied to the issue of Donbass?
— Of course, this is a macroeconomic issue. Currently, there is a crisis situation between the main suppliers of grains in major markets on a global scale. Naturally, this will affect the chain of conditions, the demand, the supply, the price and the possibility of saturation of domestic and international markets. Therefore, here it follows from the situation itself, and not from bilateral Russian-Turkish or some other relations.
An earlier decision to introduce a temporary ban on the export of grain from Russia to the EAEU countries. This measure will be in effect until the end of August. Deputy Prime Minister Abramchenko added that the export of grain will be allowed within the quota under the license of the Ministry of Agriculture. The list of exceptions also includes delivery to the LPR and DPR.
Later, Russian Prime Minister Mikhail Mishustin issued a decree on a temporary ban on the export of grain in the state of the Eurasian Economic Union and sugar in a third country, reports RIA News.